Picking a Partner

Choosing Microsoft is the easy part. It is, after all, the most prominent software company on the planet, with operating systems that run the vast majority of the world's computers and server software that's pervasive in enterprises worldwide.

But Microsoft has little day-to-day interaction with most customers. The company garners only a tiny percentage of its revenue through direct sales, so the people who sell, implement and support Microsoft products generally don't work for Redmond. Those people are Microsoft partners.

Partners function as Microsoft's sales force, as well as providing consulting and customer service for the company. For most Microsoft-focused IT departments, it's a Microsoft partner that helps navigate the software-licensing process, helps get new installations up and running, rushes in to restore or help revive a system that has gone down -- and collects the payments the customer makes for its Microsoft IT infrastructure and services. In the world of Microsoft enterprise technology, partners are very important people.

So, the key to working with Microsoft isn't really choosing Microsoft as a vendor; it's finding the right Microsoft partner to become a trusted adviser. There's no real science to choosing a member of the Microsoft channel to do business with, but there are some steps companies should follow in their search.

Microsoft's Sales Force Microsoft has always been a partner-driven company. In August 2007, Redmond Channel Partner magazine, Redmond's sister publication, said that Microsoft "runs what is probably the biggest channel program in the industry" ("Microsoft Myths").

What Does a Partner Want from You?

Matching customers and partners is not a one-sided process. While customers are responsible for doing due diligence on partners, partners also have certain expectations of the companies they're hoping to serve.

Perhaps the most important attribute partners are looking for is cooperation from a customer's IT department. Outside vendors can look like threats to IT professionals' jobs, especially at the outset of a relationship. Mutual trust is important if a project is going to succeed, says Lior Blik, CEO of New York-based Microsoft Gold Certified Partner Network Infrastructure Technologies Inc., also known as NITConnect. Those relationships can take time to develop, he says.

"A lot of the time, [IT people] are the people who are hiring us," Blik says. "[After] the first few months, we have a place. It makes their life easier. It's a matter of testing the water, but in the long term they use us a tool to implement solutions quickly."

Executive communication is also very important, he says. C-level executives need to be part of the project-planning process at an early stage in order to avoid conflict and confusion down the road. "The communication between the financial person and the person who's responsible for technology is very important," Blik says. "If they're both at the table when we go in, that's where we want to be."

Dwight Nishida, president of Honolulu-based Microsoft Gold Certified Partner High Performance Systems Inc., agrees. "I want to know the people who are going to make the decisions-the stakeholder," he says. "We need to talk to the owner and make sure they're comfortable with us. They need to take ownership of the solution."

For Chris Spears, owner of Atlanta-based Microsoft Gold Certified Partner Arke Systems, openness is critical. "What I'm really looking for in clients are ones that are willing to open up," Spears says. "If they're just coming at you saying, 'We know we have this problem; this is exactly what it is, and there's only one way to fix it,' that really doesn't do us any good. They've got to be willing to talk to us, to let that partner behind the covers of what's really going wrong before any partner's going to be able to find a cost-effective, good solution for the problem."

-L.P.

Indeed, the numbers on Microsoft's partner ecosystem are staggering. According to company officials, Microsoft has about 360,000 partner companies enrolled in the Microsoft Partner Network. (In July of this year, Microsoft officially changed the name of the Microsoft Partner Program to the Microsoft Partner Network.)

The partner program has three tiers: Microsoft Gold Certified Partner, Microsoft Certified Partner and Microsoft Registered Member. Hundreds of thousands of Partner Network participants are Microsoft Registered Members, many of which are tiny businesses, sole proprietorships or scarcely technology service providers at all. Only about 34,000 partner companies are at the Gold or Certified levels.

There are different types of Microsoft partners for different situations. A few pure resellers still make their living off of selling software without providing other services. With profit margins shrinking on software sales, the pure reseller is something of a dying breed. Much more common is the Value-Added Reseller (VAR), which customizes or enhances standard vendor software and then resells it to a customer.

In today's channel, many Microsoft partners have taken the VAR concept a step further by customizing standard software, reselling it and then providing consulting for the systems they resell. Increasingly, pure resellers and VARs are adding implementation and maintenance -- and sometimes application-hosting services -- to their repertoires with the goal of becoming long-term business partners for customers rather than just sellers of software.

Although it's important to vet any partner thoroughly, this article focuses primarily on the chronological process of choosing a strategic, long-term partner. It's these partners, growing in number and influence, which have the greatest impact on whether a company meets the business goals it ties into its technology investments.

Cast a Wide NetOnce a company decides to invest in a particular project, beginning the search for the right partner to help carry out that plan can be like looking for the proverbial needle in a haystack. With so many partners to choose from, how should IT professionals and the companies they work for go about finding the right match?

Microsoft itself is trying to simplify the process with its Pinpoint partner-finder Web site (see "Pinpointing a Partner"), but customers say that the process of finding a partner starts the way so many other searches do, with one simple Web site: Google. (Or, for folks who prefer it, Bing.)

"What I did was do a bunch of Internet research," says a manager of home entertainment at a television broadcasting company, describing how she began the process of searching for a partner to help with Web development. (She requested that she not be identified.)

Liz Simpson, software engineer for Spanx Inc., an Atlanta-based maker of women's body-shaping garments, began her search in much the same way when looking for a partner to handle a SharePoint project. Her partner search "began in the usual way, researching local companies on Google," Simpson says. "It's kind of like a Yellow Pages thing. You start looking around, looking at [partners'] Web pages."

In most cases, geography will play a major role in choosing a partner. Keeping the search local, when appropriate, helps narrow the "search engine" part of the partner-finding process.

While some companies prefer to carry out formal requests for quotes (RFQs) or proposal processes, customers say that step isn't always necessary. Spanx, for instance, didn't conduct an RFQ, but instead relied on the Web and word of mouth to find a partner. "We actually talked to people and tried to get an assessment of their technical skills," says Chuck Ryan, director of information services at Spanx.

One way companies go about that word-of-mouth networking is to talk to partners that they've worked with before but that aren't appropriate for the project at hand. Ryan says he spoke to people he'd worked with in the past to get a recommendation on a partner with SharePoint expertise. Microsoft partners very often have agreements by which they recommend each other for projects; in fact, partner-to-partner networking is very strong in the Microsoft community, and it's a concept Redmond itself is working to encourage.

Pinpointing a Partner

Experts say that Google -- or maybe Bing -- is as good a place as any to start a partner search. But Microsoft, while not discouraging the use of Bing, might beg to differ.

Last year, the company launched a beta version of Pinpoint, a Web site designed to help companies match up with partners. The concept is simple -- partners develop profiles and put them on the site, and then customers can search for partners based on a variety of criteria, including geography, technology expertise or specific project experience. Customers can also rate partners on the site.

Microsoft developed Pinpoint in order to help partners market themselves more effectively, says Peter Horsman, senior site manager at Microsoft. But Horsman says he also believes that Pinpoint will help customers become more "aware of all the possibilities that are out there." Horsman says that Microsoft isn't trying to replace Google or Bing.

"We see Pinpoint as complementary to other search engines or marketplaces that are out there," he says. "We don't want to replace the way customers are looking for a partner -- we want to help them do a much better job of it."

Microsoft says there are almost 30,000 partners worldwide using Pinpoint, 25,000 of which are in the United States. That's only a tiny sliver of the more than 300,000 partners Microsoft claims to have in its partner program worldwide, but it's not a negligible number. Oracle Corp., for instance, claims on its partner Web site to have just 20,000 partners worldwide.

Pinpoint has been online in beta form for almost exactly a year, and Horsman says that the site has experienced "substantial growth in use" since its launch.

Dwight Nishida, president of Honolulu-based Microsoft Gold Certified Partner High Performance Systems Inc., says he gets most of his business through the customer grapevine. "People we do work for, their employees go to another company, they bring us up," Nishida says.

A source more often used for buying baseball tickets or used furniture worked for Fred Seifu, president of SmartScouter, an Atlanta-area company that makes a cellular surveillance system. Seifu found a Web-development partner through Craigslist.

As simple as it might sound, search engines are as good a place as any to start a partner search, says Scott Braden, a Microsoft licensing and channel expert and senior vice president of Microsoft Services at consultancy NET(net) Inc., in Holland, Mich. And networking is a must, too.

But Braden says Microsoft itself is often not the best place to start. Microsoft will refer partners to customers, but often its recommendations are too limited, Braden explains. "The partners have a lot of hurdles to jump through before Microsoft will recognize them as being competent in a given area," he says. "Just because a partner hasn't gone through those hoops doesn't mean it's not competent."

Still, Braden adds, customers sometimes get angry at Microsoft because they "know there are 40 or 50 people who could do this project, but Microsoft will only give two names." Braden says companies should gather about 40 partners to consider before starting to narrow them down. Conducting too narrow a search for partners when starting a project can stanch innovation and lead to stale service, he says. "[Customers] consistently fail to cast a wide enough net," Braden adds.

The broadcasting manager agrees, saying that she doesn't automatically hire the same partner more than once, even though she tends to favor companies she knows. "I still have [familiar partners] bid, and I'll definitely have them included in the bid. I don't necessarily give the business to somebody just because they're a recurring vendor."

As for certification levels in the Microsoft Partner Network, Braden says that they can be esoteric and aren't necessarily critical to finding the right partner. "I don't think it matters in decision phase," he says.

Gold Certification doesn't necessarily equal large size for Microsoft partners. Nishida's company is Microsoft Gold Certified but has only 12 employees. New York-based Microsoft Gold Certified Partner Network Infrastructure Technologies Inc., also known as NITConnect, is a 60-person operation.

The processes for achieving the Certified and Gold Certified levels are fairly complicated, but the certifications, while not always indicative of the size or quality of a partner company, are not meaningless. Among other requirements, achieving Gold Certification requires that a partner have at least two exclusive Microsoft Certified Professionals on staff or contract or that the company build a Microsoft-based application tested and approved by Microsoft.

Nevertheless, going with a Microsoft Gold Certified Partner isn't always necessary. Plenty of Microsoft Certified Partners and even many Microsoft Registered Members can be valuable strategic partners. And, with any partner, it's important to look closely at the company and have a sense of confidence in it people, its competency and its vision.

Get the Low DownStarting the search for a partner is easy, thanks to the Web and a little networking. Determining the contenders and the pretenders is much more difficult. Before talking with any partner about a project, a company should draw up a non-disclosure agreement (NDA). These agreements are formalities; partners will expect to sign them at the outset of an interview.

Nevertheless, NDAs protect what could be vital and sensitive competitive information, so this is not a step to skip.

And then there's the interview process itself. Vetting partners is another area in which customers don't do enough due diligence, Braden says. "The most important things [to check for] are references and experience," he says.

References are critical in part because companies will rarely give them, meaning a company that serves as a reference for a partner is usually very satisfied. "It's one thing to be adequate, but adequate doesn't get you references," Braden says.

He also adds that, with non-disclosures in play, companies shouldn't be afraid to share their project plans with other companies who are serving as references for a partner. Obviously, it's unwise to share plans with competitors, but comparing notes with non-competitor reference companies is a must, Braden says. "If you have a document that defines what you're trying to do, send that over to the reference and ask how close is this to what they were trying to do," Braden suggests.

10 Steps to Picking a Microsoft Partner

Define your project and start with a broad search. Microsoft's Pinpoint Web site could be helpful, but it never hurts to start with something as wide-open as a major search engine.

Develop and have partners sign a non-disclosure agreement before beginning any interviews or negotiations.

Network with partners that you've used in the past but that might not have the expertise you're looking for with a particular project. Microsoft partners network well with each other and can often provide excellent references.

Get customer references. Only the most satisfied customers give references to partners, so references are important and relatively rare.

If reference companies aren't competitors, share your plans with them -- again under non-disclosure -- and ask what their experience was with a partner working on a similar project. Dig deeply into partners' technological expertise.

Find a partner with vision. A long-term consultant needs to be innovative and be able to understand and expand upon your project plans, preferably in ways you hadn't considered.

Choose a partner that puts business before technology. Just about anybody can code, but for a partner to truly be a strategic consultant, it'll need to have a deep understanding of what you do, how you do it and how you profit from it.

Don't just go for the lowest bid. Beware of partners that promise something that seems too good to be true or try to cut corners. Some up-front investment will pay off in the long run, whereas doing things on the cheap can actually end up being very costly.

Go with a partner that gives you a sense of confidence -- in its technological capabilities, in its business savvy, in the brightness of its people and in its honesty and integrity.

-L.P.

Then, he says, ask: Did [the partner] meet estimates? Did the project management team deliver? The financial health of the partner and prior work experience in a specific field or with a specific technology are also important bits of information to glean, he adds.

In the current economic climate, partners' financial health is a major concern. The economic downturn has led to consolidation in the Microsoft channel, Nishida explains. "Our competition seems to be shrinking," he says. "They either seem to be going away or consolidating."

A partner "going away" could have dire consequences for the company that hires it to be a long-term consultant. Partners should expect to be forthcoming about their profits, revenues and financial forecasts when pitching to companies.

But it's more than just references and numbers that count when choosing a partner. Ideas matter, too. Long-term partners need to have vision for a company's plans, sometimes -- preferably, even -- more vision than the company itself has.

Of course, vision can also turn into higher costs, but hiring a strategic partner that's weak strategically can cripple a company's competitiveness and render its project obsolete before it starts. It's important for customers to use the due diligence process to test partners' ingenuity.

"It's just like interviewing a candidate for a job," says David Sample, senior manager of associate learning and development at retailer Macy's Inc., who recently hired a partner to work on computer-based training systems. "You begin to find out through the conversation what [the partner's] capabilities are."

It's important, too, that companies make sure that partners understand a customer's business. Great partners will have deep technology expertise but should focus more on business than on technology. Ryan, of Spanx, says that he chose Arke Systems, an Atlanta-based Microsoft Gold Certified Partner, for his company's SharePoint project in part because "they were able to quickly understand our needs as a business in a short period of time."

Seifu agrees that business savvy should come before technology expertise: "Technical knowledge is almost a commodity," he says. "Anyone can code, but understanding what you're coding and what business problem you're solving is another issue."

It's Not All About the MoneyIndeed, technology projects are very often business projects, and while IT needs to influence the process of choosing a partner, it's critical to bring other parties into the process as well. "You've got to have the C-level decision maker understanding what [a partner] is doing and what the constraints are," Braden says. "We've seen too many projects go sideways because of simple lack of communication."

Information services director Ryan says that his relationship of trust with his company's CEO helped ease the process of hiring Arke Systems. "We didn't have a CFO, so I took on that role of looking at the financial obligation," Ryan says. "I worked directly with the CEO to get approval. It was relatively easy because she really had basically charged me with ensuring that we were being fiscally responsible."

Conversely, IT needs to keep a close watch on how other parts of the company are dealing with partners. IT's influence was critical when Sample's branch of Macy's began work with a new partner. "I go ask for the money, and then it enters into the next phase, which is pulling in the folks who have greater expertise as well as a financial connection to the project," such as IT professionals, Sample says of his partner-choosing process. "The IT manager is in broader touch with what the company's needs are. He's a direct link back into the financial world."

There's no escaping "the financial world" in any business decision, and cost is certainly a factor in the process of choosing a Microsoft partner. But it shouldn't be the only factor -- or even the most important. And cheaper is not always better, says Fran Schwartz, executive administrator at Boro Park OB/GYN, the largest obstetrics practice in the New York-New Jersey area.

Schwartz chose NITConnect for a major electronic records-keeping project. "What I liked about them was their professionalism, their honesty and their knowledge of the field and of what our needs were," Schwartz says. NIT wasn't necessarily the cheapest option, although Schwartz says that the partner's estimate fit her budget. But she was wary of quotes that seemed too low.

"Other companies that I worked with, they were cutting too many corners," Schwartz says. "There were economies that I was utilizing when we were smaller that in the end cost me dearly. That's a lesson to be learned by every company that grows. You really need to not cut those corners. You're going to pay for it double in the end."

Confidence and ConsistencyThe search for a Microsoft partner is ultimately the search for a long-term business relationship. As is the case with personal relationships, committing to the wrong partner can be painful. But finding the right one can be rewarding -- and, as much as anything else, customers say that they base their final decisions on the types of relationships they believe partners will establish. Old-fashioned values such as honesty and reliability still matter.

"What especially is good about [NITconnect] is I have responsiveness," Schwartz says. "They're able to send over somebody or walk you through. They say, 'We can handle that.' If I want to go onto VOIP -- they say they have partners that can work with you. They don't leave me."

Lee Says ...I spent my first couple of years at 1105 Media writing for Redmond Channel Partner magazine, so writing a story for Redmond on picking a Microsoft partner came pretty easily. As much as we talk in this magazine about Microsoft, it's the company's partners that our readers do business with every day. Those partner relationships are critical to the success of IT projects, so finding a partner that's a good fit is no trivial task. What I most enjoyed about this story was hearing that old-fashioned values -- honesty, reliability, integrity -- still matter more than just about anything else in a business relationship. That's a piece of good news.